PHILADELPHIA – A King of Prussia man who collected a $33,000 payday in a Philadelphia federal court for litigation brought under the Telephone Consumer Protection Act (TCPA) has just had that verdict upheld in a federal appellate court.
On March 3, the U.S. Court of Appeals for the Third Circuit found Shelton did in fact have standing to bring a TCPA suit in this matter and ruled to dismiss the appeal of Fast Advance Funding, LLC, a New York-based lending firm which offers loans to businesses,
Since 2016, James Everett Shelton has filed cases in courts around the country, alleging he has been the target of numerous unwanted telephone solicitations from a variety of businesses.
Meanwhile, Shelton is now the target of an action from a company that he sued, accusing him of perpetuating a money-making scheme through his TCPA lawsuits. FCS Capital accuses him of wire fraud, racketeering and defamation under the RICO (Racketeer Influenced and Corrupt Organizations) Act.
TCPA trials are rare. Defendants often choose to settle rather than risk an adverse trial verdict – particularly when the plaintiff files a class action.
In the instant case, Shelton was pitted against Fast Advance Funding. Shelton claimed that even after registering his cell phone number onto a national “Do Not Call” list in June 2015, he began receiving calls from Fast Advance at his number in March 2018, and it continued through April and May of that year.
“Plaintiff was harmed by these calls. Plaintiff was temporarily deprived of legitimate use of his phone because the phone line was tied up during the telemarketing calls, and his privacy was improperly invaded,” Shelton’s lawsuit said.
“Moreover, these calls injured plaintiff because they were frustrating, obnoxious, annoying, were a nuisance and disturbed the solitude of plaintiff. The calls caused plaintiff’s cell phone battery’s depletion, used up cellular data, and prevented plaintiff from otherwise using his telephone for lawful purposes.”
With Fast Advance not responding to the suit, Shelton filed a motion in limine to prevent the company from offering testimony or evidence contrary to the Request for Admissions. Fast Advance opposed the motion and argued that it did not need to respond to the request, as discovery closed before the response deadline. The District Court granted Shelton’s motion in limine.
Then the District Court denied Fast Advance’s eleventh hour request to take additional discovery, denied Shelton’s motion to strike as moot and the Requests for Admission were deemed admitted when the court granted Shelton’s motion in limine.
At trial and in the published opinion, U.S. District Court for the Eastern District of Pennsylvania Judge Chad F. Kenney took Fast Advance to task for what he called its lack of participation in the discovery process.
“Throughout this litigation, defendant Fast Advance has failed to participate in discovery. Significantly, defendant never responded plaintiff’s requests for admission, which plaintiff propounded on defendant on Feb. 11, 2019,” Kenney said.
“If defendant had responded to these requests for admission, or participated in discovery in any way, the Court would have been able to structure the case for trial. Instead, defendant was disengaged. In the weeks leading up to trial, this Court was required to email defendant’s counsel multiple times, including sending a letter via mail directly to defendant Fast Advance, to ensure that it had representation present for trial.”
The TCPA provides damages in the amount of $500 per phone call, or $1,500 per call for more egregious violations.
“As there were 22 phone calls made in violation of the TCPA, plaintiff is able to receive $500 per phone call violation. Because the Court has found that these violations were willful and knowing, plaintiff is entitled to receive $1,500 per phone call, pursuant to 47 U.S.C. Section 227(c)(5)(C),” Kenney said.
Per a May 8, 2019, decision from Kenney, Shelton was awarded the $33,000 amount in connection with the TCPA lawsuit he filed against Fast Advance.
Fast Advance appealed to the Third Circuit on two grounds: First, that District Court erred in granting Shelton’s motion in limine and second, that Shelton did not have standing to bring suit against it.
The Third Circuit’s three-judge panel of Kent A. Jordan, Joseph A. Greenaway Jr. and Cheryl Ann Krause received the appeal and decided its merits. Greenaway authored the Court’s opinion.
“Fast Advance first argues that the District Court erred in granting Shelton’s motion in limine. Fast Advance contends that it was not obliged to respond to Shelton’s requests for admission because the deadline to respond was after the close of discovery. Under these circumstances, we disagree,” Greenaway said.
“Federal Rule of Civil Procedure 36 governs requests for admission. Nothing in that rule provides that a party may ignore requests if the responses are due after the close of discovery. The rule states only: ‘A matter is admitted unless, within 30 days after being served, the party to whom the request is directed serves on the requesting party a written answer or objection addressed to the matter and signed by the party or its attorney. We have recognized that requests for admission are distinct from other discovery devices, and that a party can still be obliged to respond to a request for admission even after the close of discover.”
Given the rule as applied, Greenaway said the District Court was well within its discretion to grant the motion in limine.
Next, the Third Circuit turned its attention to the matter of standing in the case.
“Fast Advance also argues that Shelton did not have standing under the TCPA because, in Shelton v. Target Advance, Shelton admitted that he used his cell phone for both business and personal purposes. In contrast, here, there was no evidence in the record before the District Court that Shelton used his cellphone for business,” Greenaway said.
“But as the District Court here noted, there is ‘no evidence of plaintiff’s business in the record.’ By failing to respond to Shelton’s Requests for Admission, defendant effectively admitted all allegations in Shelton’s complaint. The complaint repeatedly states that Shelton’s cell phone was a ‘personal cellular telephone’ that Shelton ‘used for personal purposes.”
Greenaway concluded the complaint does not refer to Shelton’s business and that there was no evidence that Shelton used his cellphone for business purposes – therefore, Greenaway stated the District Court correctly decided that Shelton had standing to bring suit under the TCPA.
U.S. Court of Appeals for the Third Circuit case 19-2265
U.S. District Court for the Eastern District of Pennsylvania case 2:18-cv-02071
From the Pennsylvania Record: Reach Courts Reporter Nicholas Malfitano at nick.malfitano@therecordinc.com